Zoning rules requiring builders to sell houses at below-market prices to lower-income earners have boosted costs for other new Bay Area homes by up to $44,000 and squelched construction of roughly 10,700 new dwellings, according to a new study.

As a result, the state's already dire housing affordability crisis is expected to worsen as a growing number of cities throughout California move to adopt so-called inclusionary programs, say the authors of the report, "Housing Supply and Affordability: Do Affordable Housing Mandates Work?"

"This is another step in the wrong direction for promoting affordable housing in California," said Ben Powell, co-author of the study.

The 44-page study, which examines inclusionary zoning in the nine-county Bay Area, was written by Powell and Edward Stringham, who are San Jose State University economics professors. It was funded by a building industry grant and published by the Reason Public Policy Institute, a Los Angeles think tank promoting libertarian and free market principles. Powell and Stringham began studying the topic and later sought sources of funding to underwrite the study. They said the home-building industry did not influence their work or the report's conclusions.

But advocates for affordable housing, who dispute many of the report's figures, say the rules are an important way to fight the growing affordability gap. According to the California Association of Realtors, only about 21 percent of Bay Area residents could afford to buy a median-priced home in January, down from 25 percent a year ago.

"Cities are saying, 'Our own children are being priced out of the market. We need to create a more equitable development pattern,' " said Rob Wiener, executive director of the California Coalition for Rural Housing in Sacramento. Inclusionary zoning "is the only way you can get social, economic and racial integration in some of these desirable areas."

Under inclusionary policies, builders must make a percentage of new homes -- usually ranging between 10 and 20 percent -- affordable to those earning a portion of the area's median income.

Related Stories

For instance, Livermore's program requires 10 percent of units be affordable to households earning 80 percent of Alameda County's median income. For a family of four, that works out to an income of $66,250.

In the report, the authors contend that by setting price controls on homes, inclusionary zoning aggravates the very problem it attempts to solve.

A few lucky buyers win the below-market lottery, the study said, but other buyers subsidize the low-income homeowners because home builders usually spread the cost of the affordable units among the market-rate homes. In most cities with affordable housing rules, market rate homes are $22,000 to $44,000 higher. In Cupertino, Palo Alto, Los Altos, Tiburon and Portola Valley, the programs have added more than $100,000 to the price of new homes, the study said.

But UCLA economist Ed Leamer maintains that builders already charge the maximum price for market-rate units, making it unfeasible to pass along additional costs.

The study also said builders often shy away from areas with inclusionary zoning, which exacerbates the housing shortage. In the 45 Bay Area communities studied, overall housing production fell from an average of 214 units the year before an inclusionary housing ordinance was adopted to 147 units the year after, a 31 percent drop, the study said.

But Wiener suggested those statistics are misleading.

"Often (communities) adopt inclusionary housing at a point when land costs are so high that it is already difficult to produce housing," he said.

The report is the latest in a spate of recent research about cities' efforts to deal with the increasingly thorny problem of affordable housing. For decades, California's housing costs have outpaced the nation's. But in the past several years prices have exploded, cutting off homeownership for many.

As a result, more communities are turning to inclusionary zoning: Between 1994 and 2003, the number of California cities with such programs rose 67 percent, from 64 to 107 communities.

Most experts blame the affordability crunch on the relatively few new homes built statewide each year. That constricted supply is the result of several factors including California's strict environmental review process and fallout from Proposition 13, which encourages cities to approve commercial projects, which generate lucrative sales tax revenues, over costly residential subdivisions.

The report's authors say increasing the overall supply by removing ordinances that block residential building is a more efficient tactic than inclusionary zoning, which has produced fewer than 7,000 units in the Bay Area in the past 30 years. In theory, higher and middle-income consumers would move into the additional new homes, freeing up existing homes for less-wealthy consumers.

"It means we need to make available properties currently zoned for commercial and industrial in places like San Jose and Fremont, which are hoarding that land because they want jobs, not housing," said Guy Bjerke, chief operating officer of the Home Builders Association of Northern California. Still, the trickle-down phenomenon does not address the need for dwellings for very-low-wage earners, said one local housing expert, who believes it is city government's job to mandate such construction. Some Bay Area cities have built no affordable units in years. Livermore has built about 220 affordable units since its program began in 1983.